[News] Huawei’s Return to the Market with Kirin 9000S Processor Expected to Impact the Smartphone Market

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According to a report from Taiwan’s TechNews, Huawei’s Mate 60 Pro smartphone, powered by its in-house Kirin 9000S processor, quietly appeared on the market recently, testing has shown that its network speed approaches that of 5G. This development has sparked enthusiastic discussions in the market about the manufacturing and development of this chip.

Prominent analyst Andrew Lu also expressed that if the semiconductor manufacturer, SMIC, which handles the production of the Kirin 9000S processor, makes significant breakthroughs in both 7nm process technology and capacity, it should not be underestimated. Additionally, with Huawei’s reintroduction of the Kirin 9000S processor through the Mate 60 Pro, they are expected to continue launching products that are likely to have an impact on the mobile phone and mobile chip market.

Andrew Lu outlined the following points on his personal Facebook fan page:

1. The Kirin 9000S processor is likely manufactured by SMIC using N+2 process technology, with N+1 being a pseudo-7nm process that is closer to 8-9nm. N+2 is a 7nm process (not the rumored 5nm), but it does not use EUV, so multiple exposures are needed. Due to insufficient capacity, shipping 40 million units would likely take several months. Assuming a die size of 169mm² and an 80% yield rate, SMIC would need to prepare 144k N+2 capacity, this indicates a monthly production capacity requirement of 24,000 units. The monthly production capacity appears significantly higher than what was previously anticipated. If these assumptions hold, it indicates that SMIC has made significant breakthroughs in 7nm process technology and capacity.
2. Apple’s iPhone doesn’t emphasize Antutu benchmark scores as much, and Android phones typically fine-tune their systems for benchmarking, making comparisons between iOS and Android phones less fair. However, compared to other Android flagship phones scoring around 1.5-1.6 million, the Mate 60’s 1.1 million still falls short, but it excels in satellite phone functionality.
3. Huawei/Huawei’s HiSilicon’s return is likely to continue with the release of new devices, aiming to reach annual sales of 100 million phones within 5 years, which should not be difficult. This means Huawei/Huawei’s HiSilicon will regain approximately 5-10% of the global market share, while other phone and chip manufacturers will lose 5-10% of their market share with flagship brands likely being more affected.
4. Despite the U.S. putting SMIC on the Entity List, how does SMIC still have so much advanced process capacity? Lu Xingzhi believes that being placed on the Entity List doesn’t entirely prohibit companies from purchasing all advanced U.S. equipment (EUV scanners are absolutely prohibited), but it requires approval from the U.S. Department of Commerce to purchase such equipment. Additionally, the rapid emergence of many semiconductor startups in China (some of which disappear shortly after) makes it challenging for U.S. equipment manufacturers and the U.S. Department of Commerce to determine if the purchased equipment is being resold to SMIC. Therefore, SMIC’s expansion of advanced process capacity is not surprising. According to Lu’s data, SMIC’s capital intensity, capital expenditure as a percentage of revenue, was 110% over the past year, significantly higher than TSMC’s 50% and Samsung LSI’s and GlobalFoundries’ 40% range, indicating that capacity expansion is likely to be considerably higher than peers in the industry.

(Photo credit: Huawei)